Abrolhos Reef Lodge Pty Ltd (Migration)

Abrolhos Reef Lodge Pty Ltd (Migration) [2020] AATA 4994 (10 September 2020)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANT:  Abrolhos Reef Lodge Pty Ltd
CASE NUMBER:  1807480
HOME AFFAIRS REFERENCE(S):          BCC2017/190925
MEMBER:Michelle East
DATE:10 September 2020
PLACE OF DECISION:  Perth
DECISION:The Tribunal sets aside the decision under review and substitutes a decision approving the nomination.

Statement made on 10 September 2020 at 10:38am
CATCHWORDS
MIGRATION – nomination of a position – Direct Entry Nomination stream – position of Hotel Service Manager – financial capacity to employ the nominee for 2 years – updated evidence of business operations – intrastate travel and ‘drive in/drive out’ workers boosting levels of occupancy – terms and conditions of employment – demonstrated need for the position – decision under review set aside
LEGISLATION
Migration Act 1958, ss 245
Migration Regulations 1994, rr 1.13, 5.19
CASES
Bharaj Construction Pty Ltd v MIBP [2016] FCCA 902
STATEMENT OF DECISION AND REASONS
APPLICATION FOR REVIEW

This is an application for review of a decision made by a delegate of the Minister for Home Affairs on 1 March 2018 to reject the applicant’s application for approval of the nomination of a position in Australia under r.5.19 of the Migration Regulations 1994 (the Regulations).
The applicant applied for approval on 15 January 2017. The requirements for the approval of the nomination of a position in Australia are found in r.5.19 of the Regulations which contains two alternative streams: a Temporary Residence Transition nomination stream (r.5.19(3)) and a Direct Entry nomination stream (r.5.19(4)). If the application is made in accordance with r.5.19(2) and meets the requirements of either stream, then the application must be approved. If any of the requirements are not met then the application must be refused: r.5.19(5).
In this case, the applicant has applied for approval of a nomination, seeking to satisfy the criteria in the Direct Entry nomination stream.
The delegate refused the application on the basis the applicant’s nomination did not satisfy r.5.19(4)(d)(i) of the Regulations because the delegate was not satisfied that the nominee will be employed on a full-time basis in the position for at least 2 years.
Mr Cassidy, the director of the applicant appeared before the Tribunal on 17 August 2020 by Microsoft teams to give evidence and present arguments. The Tribunal also received evidence from Mr Shahid, a prior director of the company as well as oral evidence from the nominee, Mr Shafqat. The Tribunal exercised its discretion to hold the hearing via Microsoft Teams. The hearing was held during the COVID-19 pandemic. The Tribunal determined it was reasonable to hold a hearing by video, having regard to the nature of the matter and the individual circumstances of the applicant. The Tribunal also had regard to its objective of providing a mechanism of review that is fair, just, economical and quick, and the delay to the matter if the hearing was not conducted this way.
At the outset of the hearing the Tribunal confirmed with Mr Cassidy that he had given authority to Mr Shahid to represent the company even though he was no longer a director, having resigned in August 2018.
The applicant was represented in relation to the review by its registered migration agent.
For the following reasons, the Tribunal has decided to set aside the decision under review and substitute a decision approving the nomination
CONSIDERATION OF CLAIMS AND EVIDENCE
The issue in this case is whether the applicant meets the requirements for approval of the nomination under the Direct Entry nomination stream set out in r.5.19(4), which is extracted in the attachment to this decision. For the nomination to be approved, all the requirements must be met.
The application is compliant: r.5.19(4)(a)
Regulation 5.19(4)(a) requires that the application for approval must be in the approved form, must be accompanied by the prescribed fee, and, where applicable, must include the required written certification relating to conduct that contravenes s.245AR(1). The application must also identify a need for the nominator to employ a paid employee to work in the position under their direct control.
Based on the material in the Department’s file, the Tribunal is satisfied that the application was made on the approved form and was accompanied by the prescribed fee. The applicant has also provided the requisite certification as part of the application form that the applicant has not engaged in any conduct in relation to this nomination that constituted a contravention of s.245AR(1) of the Act. Accordingly, the requirements of r.5.19(4)(a)(i) are met.
In considering whether the application for approval identifies a need for the nominator to employ a paid employee to work in the position under the nominator’s direct control, the Tribunal had regard to the evidence before it, including the further documents provided by the applicant after lodging its application for review.
The Tribunal accepts that the business needs to employ a paid employee to work in the position under the nominator’s direct control. The tasks that the business needs the position to undertake are discussed in more detail below.
Accordingly, the requirement in r.5.19(4)(a) is met.
Nominator is actively and lawfully operating a business in Australia: r.5.19(4)(b)
Regulation 5.19(4)(b) requires that the applicant is actively, lawfully and directly operating a business in Australia.
Having considered the material before it, including the applicant’s financial statements, advertisements and business registration records, the Tribunal is satisfied that the applicant is actively and lawfully operating a business in Australia and directly operates that business.
Accordingly, the requirement in r.5.19(4)(b) is met.
Position is not labour-hire: r.5.19(4)(c)
Regulation 5.19(4)(c) applies to nominators whose business activities include those relating to labour hire to an unrelated business. In these cases, the nominated position must be within the business activities of the nominator.
There is no evidence before the Tribunal to indicate that the applicant’s business is involved in labour hire. The Tribunal is satisfied that the employment contract and organisational chart confirm that the nominee will work in the applicant’s direct employ.
Accordingly, the requirement in r.5.19(4)(c) is met.
Term of employment of the visa holder: r.5.19(4)(d)
Regulation 5.19(4)(d) requires the nominee to be employed in the nominated position for at least 2 years full time, and the terms and conditions of that employment do not expressly exclude the possibility of an extension.
It was the delegate’s view that the financial information before it was insufficient to satisfy this requirement.
The Tribunal has received substantially more financial information from the applicant, including but not limited to:
-Company tax return for 2017/2018
-Company tax return for 2018/2019
-Financial reports for 2017/2018 and 2018/2019
-BAS statements from 1 April 2016 – 30 September 2016
-BAS statements from 1 July 2017 – June 2018
-BAS statements from 1 July 2018 – June 2019
-BAS statement for 1 July 2019 – September 2019
-Payroll and superannuation records over several years for the applicant’s employees
A cursory examination of the financial records indicates the business has been carrying forward significant losses as reflected in the company tax return for 2017/2018. Part of this loss was offset against the net profit of the business in 2018/2019 to reduce the taxable income to $0. A significant loss carried forward exists at this point in time.
The Tribunal requested a copy of updated financial records for the 2019/2020 financial year which were provided by Mr Cassidy after the hearing.
Mr Cassidy gave evidence explaining that the business was running at a significant loss for several years. He said one of the major reasons for this was that the rent for the premises had been increased after the lease expired. He said Mr Shahid had injected large sums of money into the business which meant their creditors were also able to be paid. He said the last financial year had been one of the best, particularly in recent years, ironically because of the COVID-19 pandemic. People are travelling more during these times within the state which has led to much higher levels of occupancy.
Interestingly, when undertaking a reconciliation between the tax returns and the BAS statements for both financial years (2017/2018 and 2018/2019), wages/salaries are particularly low for both years. The 2017/2018 financial year reflected a wages expense of $33,530 and 2018/2019 financial year recorded a wages expense of $12,113. A review of the payslips provided to the Tribunal reflects that Mr Shafqat was only working for a couple of months during the 2018/2019 financial year.
Mr Shahid and Mr Cassidy both confirmed that during that time neither of them took any payments from the business. Mr Shahid has this year received a payment noted in the accounts as ‘management fees’.
Mr Shafqat gave evidence that he went to Pakistan for 3 months to spend time with his wife and newborn baby daughter. A review of his movement records reflects that he was offshore for approximately two months between August and November 2018. Prior to that he was overseas for two weeks in early 2018.
The evidence of all parties was that Mr Shafqat is currently being paid approximately $52,000 per annum and is also provided with free accommodation in one of the units.
The Tribunal was also advised that the business employs Mr Shafqat, one full time housekeeper and two casual housekeepers. They also employ somebody for property maintenance when required.
Mr Cassidy was quite frank in his evidence that the business was running at a substantial loss for several years due to the rent liability and without the injections of cash from Mr Shahid it most likely would not have remained solvent. Despite this however, a review of the 2019 /2020 financial statements (provided after the hearing) indicates the business is tracking far better and has had an increase in their sales due to the restrictions on interstate travel placed on Western Australian residents. The anecdotal evidence is that there has been a marked increase in intrastate travel in all areas of the state.
Based on the documentary evidence alone, prior to this financial year, the Tribunal would have had concerns about the financial position of the company. However, having had the benefit of the oral evidence of the current director Mr Cassidy and the former director Mr Shahid, the Tribunal is satisfied that they, together with another silent investor have invested significant sums of money into the business with the intention that it will be successful. Evidence was also given of state government approvals for investment in the region. They currently have a customer base of essentially ‘drive in/drive out’ workers who will book the motel’s units for periods of time and have been successful in securing repeat customers. Mr Cassidy stated that the success of their business is tied to having repeat customers as casual travellers will tend to be more selective with price when choosing where to stay. The units in the motel are all self-contained with bedroom, loungeroom and full kitchen facilities. This makes them an attractive option for travellers who are working in the region for several weeks at a time.
The Tribunal has also been provided with a copy of the nominee’s employment contract dated 21 May 2020 which is for a minimum of 2 years with no exclusion of an extension beyond 2 years.
Accordingly, the requirement in r.5.19(4)(d) is met.
No less favourable terms and conditions of employment: r.5.19(4)(e)
Regulation 5.19(4)(e) requires that the terms and conditions of employment applicable to the nominated position will be no less favourable than those that are, or would be, provided to an Australian citizen or permanent resident performing equivalent work in the same workplace at the same location.
The Tribunal has had regard to the terms and conditions of employment as set out in the employment contract. The contract provides for the nominee’s leave entitlements and indicates that the base salary will be $52,000 plus superannuation. The nominee also receives free accommodation as part of his salary package.
The Tribunal has been provided with salary comparisons for a Hotel Manager. The Tribunal is also mindful that the nominee is provided with free accommodation as part of his employment conditions.
The applicant does not employ any Australian citizens or permanent residents to perform equivalent work as the nominated worker. The Tribunal is satisfied that the salary amount together with the terms and conditions provided to the nominee are no less favourable than those that would be provided to an Australian citizen or permanent resident performing the same work in the same place in Western Australia.
Accordingly the requirements of r.5.19(4)(e) are met.
No adverse information known to Immigration: r.5.19(4)(f)
Regulation 5.19(4)(f) requires that there is no adverse information known to Immigration about the nominator or person associated with the nominator; or it is reasonable to disregard any such information. For these purposes, ‘adverse information’ and ‘associated with’ have the meaning given in rr.1.13A and 1.13B.
There is no evidence before the Tribunal to suggest there is any adverse information known to the Department about the nominator or a person ‘associated with’ the nominator.
Accordingly the requirements of r.5.19(4)(f) are met.
Satisfactory compliance with workplace relations laws: r.5.19(4)(g)
Regulation 5.19(4)(g) requires that the applicant has a satisfactory record of compliance with the laws of the Commonwealth, and of each State or Territory in which the applicant operates a business and employs employees in the business, relating to workplace relations.
There is no evidence before the Tribunal that indicates the applicant does not have a satisfactory record of compliance with the relevant Commonwealth and State workplace relations laws.
Accordingly the requirements of r.5.19(4)(g) are met.
Tasks of the position, genuine need for the position and training requirements r.5.19(4)(h)
Regulation 5.19(4)(h) contains a number of alternative requirements. These are set out in detail in the attachment to the decision and those relevant to this matter are as follows:
·the position and nominator’s business is located in regional Australia, there is a genuine need for the paid position under the nominator’s direct control which cannot be filled by a locally resident Australian citizen or permanent resident, the tasks of the position correspond to those of an occupation specified in the relevant legislative instrument, the occupation is applicable to the proposed employee in accordance with the specification of the occupation and that a regional certifying body has advised the Minister about certain matters relating to the position.
Location of the position and the business
The first consideration under r.5.19(4)(h)(ii) is whether the position is located in regional Australia. Regulation 5.19(6) provides that ‘regional Australia’ is defined by the legislative instrument.
The Tribunal has considered the current legislative instrument (IMMI 18/037), however Schedule 3 of IMMI 18/037 states that it only applies to applications lodged on or after 8 March 2018. The Tribunal notes that IMMI 18/037 repealed the previous legislative instrument (IMMI 17/059).
Given that neither the current instrument nor its immediate predecessor can be relied upon, in order for the Tribunal to reach a finding in respect of whether the position is located in regional Australia, the Tribunal has considered the legislative instrument that applied at the time the applicant lodged the nomination application. That legislative instrument is IMMI 13/049.
In this case the position is located in regional Western Australia in Geraldton. The postcode is 6530 and under both the current and previous instrument this postcode is regarded as ‘regional’. Accordingly, the Tribunal finds that the requirements of sub-paragraph 5.19(4)(h)(ii)(A) and (E) are met.
Subparagraph 5.19(4)(h)(ii)(B) requires the Tribunal to be satisfied that there is a genuine need for the applicant, as the nominator, to employ a paid employee to work in the position under the nominator’s direct control.
In considering this issue, the Tribunal has taken into account the evidence provided to the Tribunal regarding the nature and size of the business and the explanation as to why the nominator requires the services of the nominee as a Hotel Manager.
The Tribunal was told by Mr Cassidy that he does not actively participate in the business, as he operates a full-time accountancy business as well as other investments. Mr Shahid is involved with the business however Mr Shafqat is the one who is permanently on-site managing the day to day operations of the business. Evidence was given that the reception is open until 11pm every night in order to maximise possible occupancy. The oral evidence of all three gentlemen gives the impression of a very amicable working relationship with each other. The Tribunal accepts the applicant’s evidence that the nominee is very important in the successful operation of the business.
The Tribunal also takes into account the opinion of the regional certifying body, Skilled Migration WA dated 31 March 2017 advising the Minister among other matters that the nominated position cannot be filled by an Australian citizen or permanent resident living in the same local area as the nominated position.
The applicant provided a copy of the advertisement dated 13 January 2017 for the full-time position of a Hotel Service Manager. Oral evidence provided at the hearing by Mr Cassidy confirmed that attracting quality staff to Geraldton is not always easy and after assessment of the applicants, Mr Shafqat was considered the most suitable for the position.
The Tribunal is satisfied that the applicant has demonstrated a genuine need for a paid position under its direct control and that it cannot be filled by a local resident.
Accordingly, r.5.19(4)(h)(ii)(B) and (C) are met.
Tasks of the position
The tasks of the nominated position must correspond to those of an occupation specified in the relevant legislative instrument. The applicable instrument for this purpose is IMMI 17/058 which applies to nominations made before 1 July 2017 and not finally determined by that date.
UNIT GROUP 4314 HOTEL SERVICE MANAGERS

HOTEL SERVICE MANAGERS supervise and coordinate the activities of hotel service workers.
Indicative Skill Level:
Most occupations in this unit group have a level of skill commensurate with the qualifications and experience outlined below.
In Australia:
AQF Certificate III including at least two years of on-the-job training, or AQF Certificate IV (ANZSCO Skill Level 3)

In New Zealand:
NZ Register Level 4 qualification (ANZSCO Skill Level 3)

At least three years of relevant experience may substitute for the formal qualifications listed above. In some instances relevant experience and/or on-the-job training may be required in addition to the formal qualification.
Tasks Include:
a.determining work requirements and allocating duties to Commercial Housekeepers, Luggage Porters and Doorpersons
b.conferring with managers to coordinate activities with other organisational units
c.maintaining attendance records and rosters
d.explaining and enforcing safety regulations
e.overseeing the work of the unit and suggesting improvements and changes
f.conferring with workers to resolve grievances
g.may perform front office and hotel reception duties

Occupation:
431411 Hotel Service Manager

431411 HOTEL SERVICE MANAGER

Alternative Title:
Hotel Service Supervisor

Supervises and coordinates the activities of hotel service workers.
Skill Level: 3

The Tribunal has had regard to the tasks and responsibilities of the nominee. His oral evidence as well as information provided by the applicant demonstrates a correlation with the tasks and responsibilities noted in the ANZSCO.
The Tribunal is satisfied that the majority of the tasks which the nominee undertakes do substantially correspond to those listed in the instrument.
Therefore, the Tribunal is satisfied that Regulation 5.19(4)(h)(ii)(D) is met.
Regional Certification
The Tribunal has considered the Form 1404 Regional Sponsored Migration Scheme – Regional Certifying Body Advice issued on 31 March 2017 by Skilled Migration WA, Western Australian Department of Training and Workforce Development.
The Tribunal notes its earlier comments in relation to the current instrument IMMI 18/037 which only applies in respect of nomination applications made on or after 18 March 2018 and that it has therefore applied the provisions in the instrument that applied at the time the applicant lodged the nomination application, which was IMMI 13/049.
On the basis of the advice set out in the Form 1404 the Tribunal is satisfied that the regional certifying body has advised the Minister about the matters set out in r.5.19(4)(e) and r.5.19(4)(h)(ii)(B) and (C) of the Regulations. The regional certifying body states that:
-    There is a need for a paid employee in the nominated position within the business activities of the nominating employer;
-    The nominated position cannot be filled by an Australian citizen or an Australian permanent resident who is living in the same local area as the nominated position; and
-    The terms and conditions of employment that are applicable to the nominated position will be no less favourable than the terms and conditions that are or would be provided to an Australian citizen or Australian permanent resident for performing the equivalent work in the same workplace at the same location.
Consistent with the decision of the Federal Circuit Court of Australia in Bharaj Construction Pty Ltd v MIBP [2016] FCCA 902, certification by a regional certifying body is not sufficient or determinative in relation to whether the nominator meets r.5.19(4)(e), r.5.19(4)(h)(ii)(B) and r.5.19(4)(h)(ii)(C) of the Regulations. Accordingly, the Tribunal notes that, whilst having regard to the advice provided by the regional certifying body, it has reached its own conclusions about the matters the subject of the regional certifying body’s advice.
Having considered the Form 1404 together with the other evidence provided, the Tribunal is satisfied that the requirements of r.5.19(4)(h)(ii)(F) are met.
It follows that the Tribunal finds the applicant meets all the requirements of r.5.19(4)(h) of the Regulations.
Based on the findings above, the Tribunal is satisfied that the applicant meets the requirements of r.5.19 for approval of the nomination of the position in Australia.
DECISION
The Tribunal sets aside the decision under review and substitutes a decision approving the nomination.
Michelle East
Member

ATTACHMENT - EXTRACTS FROM THE MIGRATION REGULATIONS 1994
5.19Approval of nominated positions (employer nomination)
…
(2)The application must:
(a)be made in accordance with approved form 1395…; and
(aa) include a written certification by the nominator stating whether or not the nominator has engaged in conduct, in relation to the nomination, that constitutes a contravention of subsection 245AR(1) of the Act; and
(b)be accompanied by the fee mentioned in regulation 5.37.
…
Direct Entry nomination
(4)The Minister must, in writing, approve a nomination if:
(a)the application for approval:
(i)       is made in accordance with subregulation (2); and
(ii)      identifies a need for the nominator to employ a paid employee to work in the position under the nominator’s direct control; and
(b)the nominator:
(i)       is actively and lawfully operating a business in Australia; and
(ii)      directly operates the business; and
(c)for a nominator whose business activities include activities relating to the hiring of labour to other unrelated businesses — the position is within the business activities of the nominator and not for hire to other unrelated businesses; and
(d)both of the following apply:
(i)       the employee will be employed on a full-time basis in the position for at least 2 years;
(ii)      the terms and conditions of the employee’s employment will not include an express exclusion of the possibility of extending the period of employment; and
(e)the terms and conditions of employment applicable to the position will be no less favourable than the terms and conditions that:
(i)       are provided; or
(ii)      would be provided;
to an Australian citizen or an Australian permanent resident for performing equivalent work in the same workplace at the same location; and
(f)either:
(i)       there is no adverse information known to Immigration about the nominator or a person associated with the nominator; or
(ii)      it is reasonable to disregard any adverse information known to Immigration about the nominator or a person associated with the nominator; and
(g)the nominator has a satisfactory record of compliance with the laws of the Commonwealth, and of each State or Territory in which the applicant operates a business and employs employees in the business, relating to workplace relations; and
(h)either:
(i)       both of the following apply:
(A)the tasks to be performed in the position will be performed in Australia and correspond to the tasks of an occupation specified by the Minister in an instrument in writing for this sub-subparagraph;
(AAA)the occupation is applicable to the person identified under subparagraph (a)(ii) in accordance with the specification of the occupation;
(B)either:
(I)the nominator’s business has operated for at least 12 months, and the nominator meets the requirements for the training of Australian citizens and Australian permanent residents that are specified by the Minister in an instrument in writing for this sub-sub-subparagraph; or
(II)the nominator’s business has operated for less than 12 months, and the nominator has an auditable plan for meeting the requirements specified in the instrument mentioned in sub-sub-subparagraph (I); or
(ii)      all of the following apply:
(A)the position is located in regional Australia;
(B)there is a genuine need for the nominator to employ a paid employee to work in the position under the nominator’s direct control;
(C)the position cannot be filled by an Australian citizen or an Australian permanent resident who is living in the same local area as that place;
(D)the tasks to be performed in the position correspond to the tasks of an occupation specified by the Minister in an instrument in writing for this sub-subparagraph;
(DA)the occupation is applicable to the person identified under subparagraph (a)(ii) in accordance with the specification of the occupation;
(E)the business operated by the nominator is located at that place;
(F)a body that is:
(I)specified by the Minister in an instrument in writing for this sub-subparagraph; and
(II)located in the same State or Territory as the location of the position;
has advised the Minister about the matters mentioned in paragraph (e) and sub-subparagraphs (B) and (C).

[2020] AATA 4994

10 September 2020

Key Legal Topics

Areas of Law

Immigration

Administrative Law

Legal Concepts

Judicial Review

Procedural Fairness

Statutory Construction

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